Ocado in self-driving vans push with £10m stake in Oxbotica

Online grocery retailer Ocado has unveiled a major push into autonomous driving technology.

It has teamed up with another British company, Oxbotica, to build self-driving vehicles for itself and others who use its platform.

That could include automatic forklift trucks at warehouses, self-driving delivery vans, or even "kerb to kitchen" robots for the final leg.

As part of the deal, Ocado has bought a £10m stake in Oxbotica.

Together, they say they plan to build hardware and software for autonomous vehicles.

"We want the entire end to end operation, ultimately, to be autonomous - from the receipt of stock to the warehouse all the way through to the customer's door," said Alex Harvey, Ocado's head of advanced technology.

"From a customer's perspective you open your door and outside you will see an autonomous van or another autonomous vehicle pull up outside your house, and most likely an autonomous robot will get out of that autonomous vehicle, will collect your groceries, and hand them to you at the doorstep."

In recent years, Ocado has tried to project itself as a technology platform to be used by global retailers, rather than just an online grocery store.

It has developed robots which now pick and pack groceries at its state-of-the-art fulfilment centres, and this week, America's Kroger supermarket chain unveiled its first warehouse using the Ocado technology.

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Kroger's delivery vans also use software developed by Ocado to plot the most efficient routes.

The new partnership with Oxbotica will aim to take this idea further.

Driverless deliveries?

Oxbotica builds autonomous driving software for a range of global clients. The company was founded in 2014 by two Oxford professors - Paul Newman and Ingmar Posner - whose university research focused on self-driving cars.

The startup company has just raised new funding from investors in the UK, US and China. Ocado's £10m stake is part of that funding round, and will give it a seat on Oxbotica's board.

In its announcement, Ocado tempered expectations and said that getting permission from regulators to operate autonomous vehicles on public roads - allowing driverless deliveries to customers' homes - may take some time.

But it said that "last-mile" deliveries to customers' homes are a significant part of an online retailer's costs, with labour accounting for half of that - so autonomous vans could produce big savings.

In the short term, it sees vehicles operating in restricted areas such as its own warehouses, with the first prototypes coming within two years.

Ocado executives hate it when you call it an online grocer. The company wants to be seen as a technology platform for the world's retailers. This partnership with another British business, the scrappy autonomous software startup Oxbotica, is meant to signal the scale of its ambitions.

For Oxbotica's Paul Newman, it's an exciting opportunity for two UK companies to become a global force in technology which has been dominated by American and Chinese players - "we've got a global vision, we're going to change the way goods are moved," he told me this morning.

And Ocado's technology boss Alex Harvey points out that the company has already acquired two American tech businesses this year.

"It's normally the other way around... I think it represents a very exciting opportunity to be able to leverage the best of British between Oxbotica and Ocado and export it to the rest of the world."

Remember - big dreams about the progress towards self-driving vehicles on public roads have come up against the reality that the technological and regulatory hurdles to be cleared are very challenging,

Everyone from the former Chancellor Philip Hammond to Oxbotica's own Paul Newman predicted self-driving cars and vans should be on UK streets by now.

Prof Newman, who started his driverless car research as an Oxford University academic, admits that was a little optimistic. But he says now, the time is right: "This is a sensible proposition that makes economic sense."

But sceptics will wonder how motorists will feel about sharing the roads with driverless vans, let alone what customers will think about a robot telling you that the avocados are out of stock and you're getting oranges instead.